Machine Games Duty (MGD) came into effect on 1 February 2013. Under the new tax regime, anyone responsible for premises from which gaming machines are provided for play must have registered with HMRC by 11 January 2013. Registration was available online or via a paper application.

The new tax is payable where customers pay to play a game on a machine in the hope of winning a cash prize which is greater than the cost to play. It replaces both Amusement Machine Licence Duty (AMLD) – an annual charge for making a gaming machine available for play – and standard-rate VAT on net takings.

Affected businesses who continue to operate from 1 February onwards without having completed the registration process could face a penalty of up to 100% of the tax due. Penalties may be issued even where there is no tax due.

For more information on Machine Games Duty, visit the HMRC website.